WASHINGTON-A wild flurry of lobbying on telecom appropriations bills late last week ended with Sen. Sam Brownback (R-Kan.) withdrawing an amendment to relax the spectrum cap and House subcommittee members deciding against bankruptcy changes advocated by the Federal Communications Commission and approved by the Senate.
“We hadn’t decided on what spectrum reform we should pursue,” said Howard Waltzman, general counsel to Brownback.
Waltzman said options considered included raising the 45-megahertz spectrum cap and eliminating it altogether for future auctions.
“It’s definitely something that should be done legislatively,” Waltzman said. He added that discussions are under way with Senate Commerce Committee staff to hold hearings on the issue.
All during the day and into early evening last Thursday, wireless lobbyists scrambled to get a handle on where Brownback was headed and why he wanted to attach a spectrum cap amendment to the Commerce appropriations bill. The Senate eventually approved the bill, but without any spectrum cap changes.
The wireless industry is split on spectrum caps.
Many large, established wireless carriers represented by the Cellular Telecommunications Industry Association want the cap repealed. But CTIA has had no luck in persuading the FCC to do that.
Given that, CTIA recently urged Rep. Paul Gillmor (R-Ohio), head of an FCC reform task force in Congress, to lift the spectrum cap as part of legislative package House telecommunications subcommittee Chairman Billy Tauzin (R-La.) plans to introduce this fall.
Steven Berry, CTIA senior vice president for congressional affairs, said Brownback’s office approached him about a spectrum cap amendment. Berry said he told Waltzman CTIA’s board of directors agreed to seek removal of the cap.
Start-up mobile carriers-large and small-for which the Personal Communications Industry Association lobbies, do not want the spectrum cap overturned.
“We don’t think the cap should be lifted legislatively or by regulatory rule making,” said Jonathan Chambers, vice president of regulatory affairs for Sprint Corp. “We support the current cap size.”
As the Senate readied to debate the Commerce appropriations bill, PCIA President Jay Kitchen wrote Brownback urging him to drop the spectrum cap rider.
“If the spectrum cap is removed and the result is high market concentration, new carriers cannot enter without spectrum,” Kitchen stated.
Cellular carriers hold more than 80 percent of the wireless market nationwide, according to PCIA.
In addition to Sprint, Kitchen said others opposed to repealing the spectrum cap include MCI WorldCom Inc., U S West Inc., Telephone & Data Systems Inc., D&E Communications, the Small Business Administration and a number of small personal communications services operators.
The Senate appropriations bill increases the FCC budget in fiscal 2000 to $232.8 million.
The Senate-approved measure also includes an amendment by Sen. Susan Collins (R-Me.) requiring FCC action by next March on problems associated with new area codes and a rider by Rep. Mike Enzi (R-Wyo.) to free Baby Bell monopolies of long-standing accounting rules and safeguards.
Meanwhile, a House appropriations subcommittee decided not follow the lead of the Senate and passed a companion Commerce appropriations bill without a provision that would enable the FCC to swiftly retrieve wireless licenses from bankruptcies. The subcommittee funded the FCC at $192 million, the same as this year and $32 million less than the Clinton administration’s request.
A July 21 letter was sent to top House appropriations members by key telecom lawmakers encouraging them “in the strongest possible terms to oppose including this [bankruptcy] provision in the bill.”
The letter was signed by House Commerce Committee Chairman Thomas Bliley (R-Va.), telecommunications subcommittee Chairman Tauzin, Rep. John Dingell (D-Mich.), ranking minority leader of Commerce, and Rep. Edward Markey (D-Mass.), ranking minority member of the telecom subcommittee.
A separate, bipartisan letter, claiming the FCC license provision conflicts with bankruptcy law, was delivered to key appropriations leaders the same day. It was signed by House Judiciary Committee Chairman Henry Hyde (R-Ill.), Rep. John Conyers (D-Mich.), ranking minority member of Judiciary, Rep. George Gekas (R-Penn.), chairman of the Judiciary subcommittee on commercial and administrative law, and Rep. Jerrold Nadler (D-N.Y.), ranking minority member of the commercial and administrative law subcommittee.
“Any arguable financial benefit to the FCC, of course, must be carefully considered given the harm to other creditors that could result from the enactment” of the provision, the lawmakers stated.
House telecom leaders called the Congressional Budget Office’s estimate of $500 million for re-auctioned C-block licenses “wildly optimistic” and based on old data from auctions before the bottom fell out.
The FCC has pushed aggressively for bankruptcy legislation in recent years after seeing hundreds of C-block PCS licenses get entangled in bankruptcies and judges discounting billions of dollars on money owed to the U.S. government by General Wireless Inc. and NextWave Telecom Inc.
In bankruptcies involving the two firms, judges in different courts blamed the FCC for causing a massive devaluation of licenses after auctioning them.
The FCC fared better in the bankruptcy of another top C-block firm, Pocket Communications Inc.
